The document discusses several topics related to information systems management including: - The goals of information resource management such as increasing productivity and aligning IS planning with corporate planning. - Components of information systems planning including formulating strategy, identifying competitive advantages, and stages of IS use in organizations. - Dependence of organizations on IS applications using the McFarlan framework of strategic, turnaround, factory, and support categories. - The systems development life cycle including problem recognition, requirements determination, design, development, implementation, and evaluation. - How information technology impacts organizational structure through automating, informating, embedding, and communicating.

1. CHAPTER FIVE
Management of information systems
By: Hilemariam Kebede/PhD/

2. Goals of Information Resource
Management
Some of the major goals of information resource management
are:
– To increase the productivity, profitability and strategic
positioning of an organization by treating information as a
corporate resource,
– To align information systems planning with the corporate
planning,
– To incorporate the management of information resources in all
management activities at the strategic, tactical and operating
levels,
– To integrate the existing information technologic in the
organization in order to achieve organizational goals as a whole,
– To investigate the developments in new information
technologies and software applications and customize to the
specific needs of the organization.

3. INFORMATION SYSTEMS PLANNING
• Formulating Information systems strategy
• Information Systems strategy specifies:
– How Information Systems will be used in the
organization,
– Objective of using IS, such as support for day to
day activity, IS for analysis, or IS for control.
• Information systems can help organization in
the maintenance of competitive advantage
such as

4. – Changes industry structure and alters the rule of
competition,
– Creates competitive advantage by giving
companies new ways to outperform their rivals,

5. Stages of IS use in organization
• The use of IS in organization can be described
by the four-stage model developed by Gibson
and Nolan in 1974.
• Initiation
• Main theme of stage: - Cost reduction,
accounting applications,
• Type of IS application: - Payroll, Accounts
receivable, Accounts payable, Billing

6. • Expansion
• Main theme of stage: - Proliferation of
application in all functional areas,
• Type of IS application: - General ledger,
Budgeting, Forecasting, Personnel Inventory,
Order processing, Inventory Control.

7. • Formalization
• Main theme of stage: - Suspension on new application;
emphasis on control,
• Type of IS application: - Purchasing control, Scheduling.
• Maturity
• Main theme of stage: - Database application,
• Type of IS application: - Financial planning models,
Simulation Models, On-line systems such as personal
query system, customer query system.

8. • Identifying the position of the organization within
the above model would help managers at all
levels in formulating information system policy
and strategy. Few of the major questions that
can be raised within the above model are:
– Are management practices consistent with the stage
the company is in?
– Is the organization ready to take advantage of a
particular new technology?
– Is the system and programming group technically
prepared to support the new strategic direction?

9. Dependence of Organizations on
Information System application
• Depending on the application of IS, an organization can be located
in one of the following categories of the McFarlan 1984 model:
• Strategic IS
• Companies that are highly dependent on IT systems for their day-
to-day operations;
• Information system is considered as a decisive factor in competitive
success;
• Strong link between IS management and Senior management;
• IS development aims at developing applications that are important
for future competitive success.
• Examples of organizations in this group include banks and insurance
companies.

10. • Turnaround IS
• Companies are not absolutely dependent on IS to
achieve their objectives;
• Companies enjoy considerable IS support;
• Strong top management support;
• IS development aims at developing applications that
are important for the organization’s strategic
objectives.
• Examples of organizations in this group include
insurance brokers;
•

11. • Factory IS
• IS support is highly required for the smooth functioning of the operations
of the organization;
• Emphasis on close management control of budgets and on ensuring
reliability and efficiency;
• IS development focuses on maintenance of existing systems and
development of applications that are not essential to the organization’s
ability to compete.
• Examples of organizations in this group include airlines and large whole
sale distributors.
• Support IS
• Organization is not dependent on IS functions;
• IS management assumes lower profile;
• Examples of organization in this group include large processing and
manufacturing industries.

12. Support and factory categories Turnaround and Strategic
categories
 Static.
 Concerned with present
operation.
 Budget favors operations.
 IS planning is reactive.
 Dynamic;
 Concerned with future
operations;
 Budgets favor development;
 IS Planning is proactive.

13. Three levels of information systems planning
• Strategic IS planning
• Carried out by members of the top level strategic
managers.
• Focuses on what will be done.
• Tactical information system planning
• Carried out by tactical management,
• Focuses on how the information system plan would be
implemented.
• Operational information system planning
• Carried out by operational management,
• Focuses on who will do it and when it would be done.

14. Information system planning
methodologies
• There are a number of information systems
planning methodologies. Here, the following
four methodologies are stated.
• Stand-alone planning
• Stand-alone planning is characterized by separate
business plan and IS plans that don’t have
coordination between them.
• Information system department is reactive,
• IS planning activity is very limited,
• Such organizations are in the support category.

15. • Reactive Planning
• Under reactive planning, a business plan is first generated from
where the information system plan is derived.
• IS department assumes a passive role,
• IS department is responsible for generating system plans to support
the business plan.
• Linked planning
• Information system planning and business plan are linked together,
• Use of Critical success factor to define information needs and to
match system resources against overall business needs,
• Organizations that use linked planning are mostly in turnaround and
strategic category.

16. • Integrated planning
• Information system planning and business planning occur
simultaneously.
• IS department actively participates in the formation of corporate
plan.
• Integrated planning is a process that involves:
• Environmental analysis to analyze internal and external factors,
• Business planning (mission, goal, objective, strategy),
• Business unit and department planning (goals, objectives and
strategies),
• Development of strategic IS Plan (objectives, design principles,
constraints),
• Data planning (architecture, system portfolio).

17. Controlling information systems
• Three of the major issues that need attention in controlling organizational
information system are confidentiality, data integrity and accessibility.
• Confidentiality
• Confidentiality refers to the issue of privacy,
• Information should be accessed by only those that are authorized to use it
by the organizational policy,
• Identify possible group of users who can affect the confidentiality of data
in the organization, such as
– - Employees,
– - Hackers and crackers,
– - Competitors,
– - Criminals.
• Key considerations
– - Cyber crimes,
– - Physical security,
– Using passwords

18. • Data Integrity
• Data integrity refers to the accuracy of data,
• Data must be accurate and protected from destruction.
• Data integrity can be at risk due to several intentional actions (such
as unhappy employee or dishonest employee) or accidental or
environmental events (such as errors and omissions or fires and
floods).
• The following are some of the factors that increase the risk of data
integrity:
• On-line processing,
• Client/Server environments – distributed processing and database,
• The Internet.
•

19. • Control mechanisms that can be applied to ensure data integrity include:
– Validity and other checks,
– Hardware and software controls,
– Documentation of programs and procedures,
– Segregation of employees’ functions to prevent collusion,
– Careful selection, training of employees,
– Prevention from file infection by computer viruses.
• Accessibility
• Users must be able to access information whenever it is necessary,
• Preventing disaster such as
• - Using backup power sources,
• - Using data back up systems,
• - Disaster recovery plans,
• Using fault tolerant system.

20. Components of Information Resource
Management
• The main components of information resources in an
organization are:
• Information technologies including: -
Hardware equipment that are used to input data, process
data, store data and generate output. Examples of
hardware include computers, monitors, printers, and
storage devices.
Software application programs used for in processing,
communicating, retrieving data, storing data.
Examples include operating systems, office
applications, and network systems, email programs.

21. • People involved in collecting, transmitting and working
with information resources of the organization
including: -
– - Technical and support staff,
– - Information professional and experts,
– - Information suppliers and vendors,
• Information related facilities such as
– - Physical facilities such as buildings of computer
centers, libraries,
– - Information facilities such as archives, communication
centers and
– information centers.

22. The systems Development Life Cycle
Problem
Recognition
Requirements
Determination
Systems
Design
Development
and
Construction
Implementation
Evaluation and
Continuing
evolution

23. • Problem Recognition/Preliminary
Investigation
• This deals with examination and evaluation of
the problems of the current system. Basically,
systems development may be initiated to
solve problems, seize opportunities or due to
directives from higher body such as board of
directors in an organization.

24. • Requirements Determination—Understanding the current
system and the new system’s requirements
• A requirement is a feature that must be included in a
system. It may be a way of capturing or processing
information, a method of interacting with the system, a
processing activity or result, a piece of information
displayed or printed as a result of processing, or a function
that can be performed to safeguard data and information.
• During requirements determination, the system analyst
studies the current business situation, collecting and
analyzing data and information to determine who is
involved. Requirements determination should address
either or both types of improvements: process
improvement (such BPR) and business improvement.

25. • Systems Design – Planning the new system
• A system’s design is the set of details that
describe how the system will meet the
requirements identified during requirements
determination. The process of translating
requirements into design specification is system
design.
• Systems design takes place in three phases:
preliminary (conceptual) design, prototyping, and
detailed (physical) design.

26. • Development and Construction-- Creating
the new system
• During development and system construction,
the system is actually built. Physical design
specifications are turned into a functioning
system. The principal activities of
development are the acquisition of software
and services, computer programming and
testing.

27. • Implementation
• During implementation, the new system is
installed and put into use. New systems often
bring many changes to a business, including
new procedures, different individual
responsibilities, and adjustments in the flow
of information. Three important aspects of
implementation are training, site preparation
and conversion management.

28. • Evaluation and Continuing Evolution – Monitoring and
adding value to the new system
• Once implemented, analysts perform systems evaluation
to identify the strengths and weaknesses of the system.
They want to determine if the system delivers the expected
level of usability and usefulness and if it is providing the
anticipated benefits.
• Systems are often used for many years. However, the
organization, the people using the system, and business
environment will change. For this reason, all systems need
to undergo continuing development, with features being
added and capabilities augmented as new or improved
technologies are introduced.

29. Information Technology and
Organizational Structure
• Information technology affects business processes and
organizational structure in four fundamental ways:
automating, informating, embedding and
communicating.
• Automating refers to the automation of routine
work, such as the automation of typing with the use of
word processing technology. In contrast, informating
provides computing support for manipulating,
calculating, and analyzing data. Developing a
spreadsheet to make budget projections is an example
of informating.

30. • Embedding information technology is increasingly
common. Automobiles, commercial aircraft, and
microwave ovens all have integrated circuits that
provide diagnostic and monitoring capabilities. In an
automobile, for example, compute chips analyze
potential maintenance problems such as insufficient
tire pressure or low oil levels.
• Communicating is supported by networking
technologies such as electronic mail and
videoconferencing. Networking technologies are
instrumental in increasing the manager’s span of
control, eliminating the need for a layer of middle
management, and improving overall responsiveness.